The Pound Sterling to Euro (GBP/EUR) exchange rate made gains on Monday and is forecast to challenge the 1.39 level as the latest Eurozone data came in worse-than-expected. Also weighing on the single currency was the defeat of Finland’s pro-EU coalition in the nation’s general election.
The Pound Sterling to Euro (GBP/EUR) exchange rate touched a session high of 1.3901
Data out of Germany saw the Euro come under pressure early on in Monday’s session as it showed that producer prices declined at a faster-than-expected pace in March. According to Destatis, Germany’s Producer Price Index (PPI) fell by 1.7% on a year-on-year basis. The decline was worse than the 1.6% drop forecast by economists.
On a monthly basis, the PPI rose by 0.1% in March to match the figure seen in February. Economists had been forecasting for prices to increase by 0.2%.
Next up was data out of Greece, which added to the nations woes. According to a report released by the Greek central bank, the nation’s current account deficit widened in February compared to the preceding month. The deficit widened from a reading of -€0.847 billion to -€0.929 billion.
Rounding off the disappointing data was a report released by Eurostat, which showed that construction output across the Eurozone fell sharply in the second month of the year. Construction tumbled by -1.8% on a monthly basis and by -3.7% on an annual basis. The decline in construction suggests that despite signs of improvement in the wider economy the Eurozone still has a ways to go before it can claim that a strong recovery is underway.
Following the release of the data, the Euro weakened against the US Dollar (USD), South African Rand (ZAR), New Zealand Dollar (NZD), Australian Dollar (AUD) and Swiss Franc (CHF).
Finland General Election Sees Spike in Support for Euro Sceptic Party
A weakening domestic economy and worries over Russian sanctions saw Finlands Centre Party, led by self-made millionaire Juha Siplia win the nation’s general election over the weekend. In second place came the Eurosceptic Finns party, which is now favourite to form a coalition with Siplia.
The rise of Euro sceptic parties will be of concern to the EU as it faces the potential fallout of a Greek exit from the Eurozone and comes under pressure to ease sanctions against Russia.
With the UK general election rapidly approaching it remains to be seen whether the Euro sceptic UKIP party will surprise the pollsters and take more than a handful of parliamentary seats.